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New Chrysler Link Could Bring Fiat Cars to U.S. via Mexico
For years, Fiat has dreamed of building a manufacturing plant in Mexico that would give it a link to the U.S. market. Now, the Italian automaker's freshly announced plan to take a stake in Chrysler may mean such a plan will come to pass. There's reason to believe that the wildly popular little Fiat 500 could be built at Chrysler's Toluca, Mexico, plant before the year is out.
Both companies would bring new products to compete in NAFTA, to increase revenues and market share. Fiat could use Chrysler's dealership network to sell small cars with its brand, and other compact cars from the Italian manufacturer could be offered with a Dodge or Chrysler badge on them.
It's somewhat surprising that, despite Fiat's number-one status in Brazil — the largest auto market in Latin America — the automaker's presence in Mexico is small. Last year, Fiat sold under 3,000 vehicles in Mexico for a less than 0.5 percent market share.
Having a manufacturing facility in Mexico makes sense, both to serve the domestic needs of that market where Fiat has significant potential, and to be a convenient export center for North, Central and South America. The weakness of the U.S. dollar — and the peso's record of fluctuating in line with the dollar — doesn't hurt matters. NAFTA means there are no import duties, so bringing cars to the U.S. from Mexico will make far better sense than importing cars to the U.S. from Europe or even Brazil.
Chrysler's Toluca plant in Mexico currently produces the Dodge Journey and the PT Cruiser. After almost a decade, the PT Cruiser will come to an end this summer, and a capacity of up to 100,000 thousand vehicles will free up. A new platform could be launched in 2012 and reach 60,000 units in 2013, according to a report by CSM. But this report was created before Fiat's intentions with Chrysler were known. Both companies could start working a plan, either to import while the Toluca plant is set up or to develop a supply base and produce the car there.
Alfa Romeo models are also reportedly being considered for North America. Chrysler has capacity in Canadian, U.S. and Mexico plants — so possibly those could be Fiat's choice for production rather than building a new plant altogether.
Both companies would bring new products to compete in NAFTA, to increase revenues and market share. Fiat could use Chrysler's dealership network to sell small cars with its brand, and other compact cars from the Italian manufacturer could be offered with a Dodge or Chrysler badge on them.
It's somewhat surprising that, despite Fiat's number-one status in Brazil — the largest auto market in Latin America — the automaker's presence in Mexico is small. Last year, Fiat sold under 3,000 vehicles in Mexico for a less than 0.5 percent market share.
Having a manufacturing facility in Mexico makes sense, both to serve the domestic needs of that market where Fiat has significant potential, and to be a convenient export center for North, Central and South America. The weakness of the U.S. dollar — and the peso's record of fluctuating in line with the dollar — doesn't hurt matters. NAFTA means there are no import duties, so bringing cars to the U.S. from Mexico will make far better sense than importing cars to the U.S. from Europe or even Brazil.
Chrysler's Toluca plant in Mexico currently produces the Dodge Journey and the PT Cruiser. After almost a decade, the PT Cruiser will come to an end this summer, and a capacity of up to 100,000 thousand vehicles will free up. A new platform could be launched in 2012 and reach 60,000 units in 2013, according to a report by CSM. But this report was created before Fiat's intentions with Chrysler were known. Both companies could start working a plan, either to import while the Toluca plant is set up or to develop a supply base and produce the car there.
Alfa Romeo models are also reportedly being considered for North America. Chrysler has capacity in Canadian, U.S. and Mexico plants — so possibly those could be Fiat's choice for production rather than building a new plant altogether.
